Month: April 2003

What are the new business development conundrums for the small-to-medium-sized design consultancy? Simon Teer explains why those consultancies that embrace change and achieve real differentiation in their service proposition and new business strategy can succeed in a tough climate – and why those that don’t must face the consequences.

When it comes to new business development, one thing that cannot be ignored is the significant rise in the number of consultancies that make up today’s UK design industry. More breakaways, more start-ups… and so the potential slice of new business cake begins to resemble a few crumbs.

According to reliable sources, since 1998 the market is estimated to have increased from 3,000 to well over 4,000 firms. Seventy-five per cent or more of these 4,000 plus firms are referred to as SMEs employing 20 or fewer staff.

So what does this tell us? On the one hand it’s clearly a healthy sign. On the other, it represents ever-increasing competition in what some would regard as an already overcrowded market.

Many of these consultancies are set up by designers with an unquestionable passion for design, yet less than a keen eye or interest in the dynamics of effective new business development (NBD). In fact, the clichéd inability of the creative to self-promote, or to build business opportunities towards the development of a tangible asset, can become a millstone around the neck.

Creatives find themselves wrapped up in what they do best – using their skills to meet the day-to-day demands and deadlines of their ‘here-today’ clients – yet in doing so, they neglect NBD, the essential driving force behind any business.

The problem here is that, with occasional exceptions, good designers aren’t necessarily good business getters.

Yet to attract and win new business, consultancies must raise their game and step outside their ‘comfort zone’. They have to evolve new initiatives that attract interest and challenge incumbent consultancy relationships. Fundamentally, changing consultancy owner/manager attitudes towards the mechanics, timescales and resource needs of NBD is where the journey begins.

But what sort of NBD resource do you choose? Do you outsource a new business developer or employ in-house? Choose a specialist NBD consultant or an appointments arranger? A new business developer or a marketer? Heavyweight, middleweight or a junior? Do you choose a six- or 12-month performance review deadline?

Most consultancies have had their share of experiences trialing these resource options – and often find themselves dissatisfied with their return on investment. The battle for survival and growth places serious pressures on NBD. Eager for results, performance expectations are often set unrealistically high, both in relation to the actual competitive advantages of many creative consultancy propositions, and to the sheer volume of competition and general market conditions.

Client referrals and movers are always welcome, but cannot be relied upon, and project-by-project client relationships can be fickle things. Ensuring you strike a balance between evolving a sustainable new business strategy and the maintenance/organic growth of existing clients is the first step towards getting the internal framework right.

Yet while investment costs are a major factor and can be prohibitive for the smaller consultancy, these are not the only considerations when tackling the NBD conundrum. The other side of the coin is ‘differentiation’. Do you dare to be different?

To captivate you must truly differentiate from the rest. The vast majority of consultancies simply do not do this, or they pay lip service to defining their competitive advantage.

What is compelling, persuasive and distinctive about your business? What do you offer that no one else does? Does your consultancy aspire to lead and create new trends – or simply follow the pack and bolt on the latest fad?

Consultancies with a me-too proposition must establish more radical ‘differentiation factors’ within their new business strategy before they can expect interest to be shown and, in turn, reasonable returns from their new business developers. If you fail to truly differentiate your service offering, you risk costly NBD efforts and the potential to attract new clients.

There are many potential ways of differentiating business products or services – but it takes some soul-searching, courage, trust and a commitment to the process.

Those that do step out of the comfort zone and push the boundaries generally gain a high profile. First Direct pioneered stand-alone telephone banking in 1989 before reinventing itself as an Internet bank; Virgin first launched the much-followed Virgin One ‘offset’ account in 1998; Dyson has rejuvenated the humdrum domestic appliance market: and ‘AllDayPA’ was the first-to-market revolutionary ‘virtual office’ global business concept – brainchild of Reuben Singh.

These examples demonstrate the potential we all have to steal a march on our rivals by taking a recognised product, service or facility – much like design – and having the courage to explore beneficial change. No one says it’s easy: but it is possible.

The fact is, our new business target audiences are no different to you and I – we know they’re inundated with similar claims and offers from your competitors so we must spark their imagination with telling benefits. Over 70% of client companies already have partnerships in place with one or more of your competitors, offering more or less the same service as you. Yet according to Design Council research by PACEC for “Design in Britain 2001 / 2002”, change is proactively introduced and managed by just 20 per cent of UK companies.

Would you use a me-too supplier? Let’s take a simple scenario. You’re a small- to medium-size, relatively low profile creative consultancy knocking on doors. You have a website, loyal clients, and examples of work or case studies, news, client testimonials and all the usual trappings. Yet these component parts simply represent your credentials – they do not provide compelling reasons for companies to contact you. What’s more important is they also describe literally hundreds, if not thousands, of other design consultancies.

The irony is that most people in design consultancies spend their working lives trying to differentiate their clients’ products or services from their competitors. Yet how many do this for themselves? Most are too close to their own service proposition to make a judgement in the cold light of day and should seek independent objective advice. The trick is to stand well back from your business and look at it totally objectively – a process which, by definition, most owners/managers find very difficult to do.

Which brings us back full circle to the need for either a full-time new business developer or an independent that has the necessary objectivity, experience, analytical and planning skills to steer the formulation of a strategy that will work.

Differentiation is an important tool in your NBD arsenal, and NBD is not an optional function to be employed when you can afford it. They are both integral, permanent functions which will set you apart from everyone else and build your reputation in the process.

Addressing these problem areas will make the world of difference between mere survival and long-term future success.